Wicked Change Management

October 15th, 2012

This article continues the Wicked Series. The series began in October, 2011 with the Wicked Primer, and was followed by articles on Wicked Problems in Construction, Wicked Tools, Wicked Solutions, and Wicked Procurement. After a break to hear from a couple of guest columnist—Andrew Abernathy and Pete Baston—the series continues.

Change management presents wicked problems in every industry, though the AEC industry seems particularly resistant to change. This article introduces wicked change management in the context of our evolution from a push economy to a pull economy. Next month we will dig deeper into the topic. For now, an introduction.

Emerging knowledge economies depend on Big Data(1) and collaborative analysis of Big Data by integrated teams of collaborators. Building Information Modeling (BIM) a subset of Big Data, provides the AEC industry with a peek behind the Big Data curtain and arms advocates of IPD, BIM, and lean processes with data that mirrors Big Data in other enterprises. Integrated Project Delivery (IPD) and similar collaborative delivery models represent a beachhead established by advocates of the knowledge economy in the AEC industry. Opponents of change dismiss IPD and, to a lesser degree, BIM and lean business processes for myriad reasons, most of which mirror classic characteristics of wicked problems. Change management problems, whether in the AEC industry or elsewhere, are often wicked problems.

Change Management (aka, Fixing Stupid)

The best politically correct definition of change management is “Managing the process and people side of change by planned actions designed to help people to move to a desired outcome.”(2) To state the problem less delicately, change management requires that we fix stupid. Fixing stupid, as your father likely told you, is no small task, but that is the essence of change management.

Professional consultants euphemistically refer to it as a soft science. Research confirms efforts to plan, implement, and manage significant changes within an organization typically fail 70 percent of the time.(3) Thus, the professionals who call it a “soft science” are really saying, “fixing stupid is hard, and if I fail it’s your fault.”

Change management programs often revolve around adoption of new software, new maintenance protocols, and new sales initiatives. In the Built industry, BIM adoption and implementation programs, IPD solutions, and lean processes all involve significant change. The moniker “change management,” a misnomer if there ever was one, ignores the leadership piece of the puzzle critical to adopting and driving change through an organization. Management focuses on tracking productivity and ensuring the team stays on task. Leadership provides the vision, an essential element of any change management program.

Again, fixing stupid is hard. It takes leadership, superior management skills, and a great plan.

The Emerging Knowledge Economy

As the 20th century’s push economy fails—and flails—the 21st century’s pull economy rises. Some refer to the emerging economy as a knowledge economy, but the term “collaborative pull economy” fits well, too. For evidence of the looming, nay imminent, demise of our push-oriented 20th century economy, see The Shift Index.(4) The chart below, excerpted from the Shift Index study, graphically demonstrates the long-term decline in the value of assets held by publicly traded companies in the United States.

Figure 1: Asset profitability for U.S. firms steadily falls more than 75 percent over the past four decades.

The Shift Index chart above demonstrates that public sector firms lost almost 75 percent of the value of their assets from 1965 through 2008. (5) The pace of loss appears to have accelerated over the past four years for firms that cling to the 20th century push economy model. That decline, emblematic of bigger problems, calls for explanation.

So what explains the death spiral of the old-school push economy and what, if anything, can be done to reverse the trend?

Throughout the 20th century, American business sought to leverage experience and economies of scale in an effort to increase efficiency and productivity. The following image reflects this “experience curve” and the long, slow, flattening of that curve correlates with the decline in ROA reflected in the chart above and demonstrates the classic dilemma of diminishing returns. For a Built industry point of reference, think of design, bid, build as the experience being flattened over time.

By contrast, the 21st century pull economy depends, more and more, on collaboration curves to increase efficiency and productivity. Collaboration, especially on a cross-disciplinary basis, increases knowledge, efficiency, and productivity much more rapidly than sharing stale knowledge about a stale process within an organization. Design, bid, build—contrasted with integrated project delivery (IPD), job order costing ( JOC), and even design, build, and construction manager at risk—serves to highlight the value of collaboration.

Integrated team building among multiple firms, collaborative cross disciplinary cooperation among Built professionals within those firms, and joint application of lean business tools and processes increase efficiency and productivity at far greater rates than individual firms can achieve operating alone in their silos.

Extensive studies of IPD and BIM demonstrate those tools add value from project to project. With value on a project basis established, the question becomes how to deploy these powerful tools on an industry-wide basis.

Collaborative Pull Strategies—Leveraging Knowledge

One piece of the puzzle may be 21st century pull strategies. Pull strategies add value through increased collaboration that enables more workers to leverage knowledge more quickly across the economy, providing the Built industry with an exciting path forward.

Access to innovation hubs, attraction of talented individuals and firms to those hubs, and sustained achievement will drive adoption of collaborative pull strategies in the Built industry. The image titled “Pull Framework,” also part of The Shift Index study, provides a graphic representation of these concepts.(6)

Rather than drive efficiency and productivity internally along the axis of an ever-diminishing experience curve, more and more firms look to the ever-increasing returns available to entities that join forces to leverage knowledge over time along the axis of a complex collaboration curve.

Those organizations possess and share vast quantities of information relevant to the task of adopting, implementing, and leveraging those tools in the Built environment, behavior that renders them attractive access points for talented individuals and organizations interested in learning more about those tools. Individual firms also serve as collaborative centers that provide access to critical knowledge. Access points, i.e., those places where knowledge resides, attract talented professionals and entrepreneurs interested in learning more. Achievement quickly follows.

In the Built industry, talented individuals and innovative firms armed with knowledge of how IPD, BIM, and lean processes increase efficiency and productivity at the project level are beginning to extend those processes to broader business models, gaining additional value.

Advanced Change Management Techniques

Accelerating adoption of a 21st century collaborative, pull-oriented business model ought to be the goal of every AECO industry organization. Big Data, BIM, and accelerating rates of connectivity ensure rapid change. Entities that wish to leverage these innovative tools face a number of challenges. BIM adoption and implementation represents a significant challenge for many in the industry. Adopting the IPD model for projects involves significant and profound changes in both process and culture. Implementation of lean business processes, likewise, requires change. Crafting, negotiating, and executing new-generation legal instruments that support and enable IPD, BIM, and lean processes involves significant change. Organizations interested in leveraging these tools must explore advanced change management techniques that support such radical change.

One such technique involves leveraging brain science. Training change participants to think differently, overnight, by establishing new thought patterns and problem-solving skills isn’t the sort of thing most change management professionals claim to do. But one company advocates just such an approach.

Too Serious, Ltd., Toronto, Canada, develops collaborative, hands-on programs designed to change the way participants think about problems. And the two-day program achieves success, literally overnight. A Too Serious distributor in Australia, Onirik, provides a good summary of the program on its website.(7)

Too Serious carefully studies existing business processes for an extended period and carefully models a client’s real-world assets, processes, and limitations. Importantly, Too Serious recreates the physical environment in which the workflow normally takes place. Before proceeding, the company brings an array of stakeholders from thoughout the organization who tackle change management issues together as a team. Too Serious has used the program to drive change in several sectors of the economy. The program, used successfully in public transportation, mining, and the pharmaceutical industry, takes center stage next month.

Conclusion

Typical construction projects give rise to a series of Wicked Problems, not the least of which is how to manage complex change, especially fundamental changes of the kind IPD, BIM, and lean processes require. Such vexing problems require advance solutions, or Wicked Change Management solutions. Next month we will explore Wicked Change Management in more detail.

Characteristics of a Wicked Problem

Evolving definitions. The definition of a wicked problem evolves, triggering solutions which, in turn, change the definition of the problem.

Continuous solution cycle. Because the definition of the problem continues to evolve, solutions emerge continuously, concluding when problem solvers run out of time, energy, money, or some other limiting resource.

Perfect solutions prove elusive. Objective solutions elude wicked problem solvers, with most ranging from best to worst or acceptable to unacceptable.

“One off” problems.No two projects are alike, and thus, no two wicked problems are the same.

Creativity and judgment drive solutions. Pursuit and implementation of wicked solutions depends on the creativity and judgment of the stakeholders.

James L. Salmon, Esq. is president of Collaborative Construction Resources, LLC and the creator of the IPD in 3D Program and the BUILT System. James is an attorney, mediator, IPD facilitator, and collaborative consultant who helps stakeholders in the AEC industry implement the BUILT System and negotiate and implement effective integrated agreements. You can reach James at JamesLSalmon@gmail.com.